Buy to let fever?

ReportInvestor

Not quite.

The difference in the UK is the 70% owner occupier thing.

That has given the 70% the benefit of house price inflation (huge) in a low inflation environment.

No wonder Gordon 'n Tone got re-elected twice. No political commentator needs to look further than this.

But it has created a larger than usual divide between the property haves and have-nots

Tassotti

meanmachine wrote:

250K was an astronomical number then, and it still is.

Factor in mortgage interest and that's 500K you've got to earn over the course of your life.

Now that's scary.

500K is 16 years at 30K per year...25 years at 20K per year (mortgages can be paid off over 30 years, and what with flexible mortgages and the like, this yearly figure can be dramatically reduced)

It is nothing ..Work out what you earn over your working life. I bet it is a lot more than 500K

nelly_2

Tassotti wrote:

500K is 16 years at 30K per year...25 years at 20K per year (mortgages can be paid off over 30 years, and what with flexible mortgages and the like, this yearly figure can be dramatically reduced)

It is nothing ..Work out what you earn over your working life. I bet it is a lot more than 500K

25 years at 20k

The average wage is about 22 or 24 so thats abot 2 or 4 grand to live on

cracking idea.......if yer stoooooopid.

ReportInvestor

Since the UK is a small island and we don't have an issue with depopulation (except north of the border) and since property tends to follow wages (4% pa) rather than inflation (2.5%), and since capital gains on your own home are tax free, you can sort of see where Kirsty 'n Phil are coming from.

But every bubble is made to burst.

It's just a question of when?

meanmachine_2

ReportInvestor wrote:

Since the UK is a small island and we don't have an issue with depopulation (except north of the border) ?

And North of the Border is where the most rampant HPI has been seen in recent times. Bubble-licious?

Tassotti

The point is though, anyone earning 24K is not going to be looking at a property valued at 250K.

They will be looking at properties around the 100K mark, and, there are plenty of them across the country.

Actually, getting back to the subject of BTL, I do happen to think it is not the best investment at the current time, unless you find an outstanding rental yield, or know what you are doing.

I agree that a yield of 5% is poor, and it can be a major hassle being a landlord.

Yes its great when property is rising and not so great when it is flat, as it is now and, in my opinion, may remain that way for a few years.

However, people who got into the BTL business a few years ago have done okay, and yes its a cliche, but over time property value will always rise.

The question is can the BTletters continue if the worst happens..interest rates rise to 12%, recession, house price crash?

But then again, can anyone?

Deemy

Save and earn compound interest or pay someone else compound interest you make the choice !

F_T_Buyer

Can someone confirm the K&P advert that was on TV. Did they say property has outperformed every other investment for the last 50 years? It now says 20 years. Can someone confirm it said 50years originally?

ReportInvestor

The first time I heard it I heard 20.

Presumably that outperformance will be in their chosen "hotspots".

To be revealed .

kayleigh

I think it really depends where you buy - in many areas in Scotland (the market I know) the prices are still rising at 10-20% a year - and this shows no sign of slowing down.

You can pick up flats in areas of Kilmarnock for instance - for 60k - where you will get 350-400 a month rent - I have not had a void in my 4 flats in the last 4 years. Each one has rented within a week of my 1st advert. These same flats were 40k-50k this time last year

Dundee is another area where I have seen huge prices rises in the last 2-3 years - again flats are readily available for 50-60k - and you will get 400 for any 2 bed.

My flat in Edinburgh has not gone up in value in the last year - and due to the competition from other rentals - I lose money on it each month. I bought it for 80k and it is valued at 130k - I have no idea how someone now buying in Edinburgh could possibly get back in rent what they would be paying out in a mortgage.

I think if you stay out the areas which are already over priced - and stick to areas where the prices are still catching up - your less lightly to get stung.